Water bills to be 5% lower - Ofwat

Household water and sewerage bills are set to be about 5% lower on average in real terms over the next five years, the industry's regulator said today.

The figure, which excludes inflation, is based on Ofwat's draft determination on price controls for all 18 water companies in England and Wales between 2015 and 2020. A final decision on bills will be made in December.

The regulator said it has also secured a substantial investment programme worth more than £43 billion or almost £2,000 for every household.

Most companies put forward lower bills in business plans submitted to Ofwat in June, with the exception of Thames Water and Dee Valley Water.

Ofwat chief executive Cathryn Ross said: " This is good news for customers - with bills held down and better service. Our challenge to companies has resulted in the sector's biggest ever customer conversation.

"Delivering for customers rather than ticking regulatory boxes will drive what companies do over the next five years. Some will find this tough, but companies which really stretch themselves will reap the benefits of increased customer trust and confidence."

Three companies - Bristol Water, Thames Water and United Utilities - have been given further time to review their plans due to a "very material gap" between their expenditure projections and Ofwat's view.

Thames Water's revised plan reflects uncertainty about the impact that building the Thames Tideway Tunnel will have on customers' bills.

Tony Smith, chief executive of the Consumer Council for Water, welcomed the proposed price plans but said the regulator could go further and shave even more off bills through tightening up companies' borrowing costs.

He added: "This is good news and reflects that customers are driving water pricing more than ever before. But it should not be seen as job done.

"We think there is still an opportunity for Ofwat to deliver an even better deal for customers, at a time when one in five households already tell us their water bill is not affordable."

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